Typically, a financial product applicant submits an application for a financial product, such as a loan application or mortgage application, to a financial institution such as a bank. The financial product application includes varying amounts of financial history and credit information. In some instances, an application cannot be completed at the time application initiation, but rather, some information, for example an appraisal of a home or income verification, must be gathered throughout the financial product application process, which, depending on the financial product can be many weeks or more. In some instances a mortgage loan officer (MLO) originating an application has limited visibility into its likelihood of approval, and possibly less visibility into its likelihood of being canceled by the applicant.
In typical financial product applications, a fulfillment team makes approval decisions on application based on predetermined underwriting criteria. Many of the underwriting criteria involve risk management and are related to credit, collateral, income and debt. Further complicating the application process is the fact that some of the data required for an application originates from third parties. Also, most applications require individual attention in order for the fulfillment team to make educated business decisions regarding each application. In certain economic climates, such as periods of low interest rates, a high volume of applications are initiated. Applications are generally processed by fulfillment teams as they are received. Thus, overall fulfillment processing can be drastically improved by optimizing the order of applications around funding rates, which are also referred to as pull-through rates. Pull-through rates refer to the rates at which applications are approved and funds dispersed. The pull-through rates, of course, are negatively influenced by deny or cancel outcomes. A “deny” outcome refers to an application being declined by the financial institution based on an underwriting decision. A “cancel” outcome refers to an application being withdrawn by an applicant before a final decision has been made by the financial institution.
Outcomes are generally time sensitive. The cancel rate of applications increases in a substantially linear fashion beginning from initiation of the application, whereas the pull-through outcomes and deny outcomes are typically determined later in the application timeline due to the necessary information gathering and decision-making process. Hence, a system for evaluating a set of present financial product applications for likelihood of cancel and deny outcomes is needed.